Special Report: Top College Athletic Directors Preview Athlete Revenue Sharing Plans
TAB Analysis + Key College Athletics Leaders in their Own Words
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The country’s largest college athletic departments rake in billions of dollars annually, largely through media deals driven by football and basketball. Over the past couple of months, athletic directors from five of the top ten revenue-producing athletic departments (with aggregate revenue in excess of $1.2 Billion) have publicly discussed how they are starting to plan for revenue-sharing arrangements with college athletes. In this article we break it all down from an athlete’s POV and share video/audio of the key stakeholders so our subscribers can hear from them in their own words.
College Athletes’ Views on Revenue Share
Polling of college athletes previously published by TAB, in conjunction with The Generation Lab, reveal that the majority of college athletes (especially in revenue-generating sports) expect to receive 20-30% of total athletic department revenue on top of existing scholarships and stipends, which would put the athlete revenue share figure closer to 45-50% of total athletic department revenues. There is a high expectation by college athletes that they are entitled to and will receive a fair share of the revenue they create. This hopeful expectation gives the NCAA, conferences, and athletics departments a window of opportunity to begin to deliver a fair revenue share to athletes either through a settlement of the antitrust cases and/or adoption of some version of Gov. Charlie Baker’s Project D1 Proposal through the NCAA legislative process.
NCAA President, Governor Charlie Baker Discusses his Athlete Compensation Proposal - dubbed Project D1
Since the NCAA’s interim Name, Image and Likeness (NIL) policy was adopted in July, 2021, college athletics has been on an athlete compensation trajectory that leads to colleges directly sharing revenue with athletes. This approach was accelerated by NCAA President Charlie Baker's announcement of his Project D1 Proposal in December, 2023 that was formally introduced into the NCAA legislative process at the NCAA meetings this past January. In a recent interview with Dan Murphy on ESPN, Baker said, “I think there is a fair amount of agreement that people would like to see the most highly resourced institutions do more for student-athletes and I believe those institutions would like to do more. The hard part is coming up with a framework that makes it possible.”
The Antitrust Cases v. NCAA are the Main Drivers of Past, Present, and Future Athlete Compensation
To be clear, all athlete compensation gains are driven by the antitrust class-action lawsuits led by powerhouse sports attorneys Jefferey Kessler and Steve Berman. The most pressing litigation, dubbed the House v. NCAA case could result in billions of dollars in damages against the NCAA and conferences. In order to settle the antitrust litigation, Jeffrey Kessler said in a recent interview on the Pablo Torre Podcast. “There are two elements to it. 1) There would have to be fair compensation for the damages, and 2) For the future there would have to be a fair system agreed to.” Around the country, top athletic directors appear to have accepted that conclusion and the top end of college athletics is moving toward an economic model that has each college athletic department sharing revenue directly with its athletes.
In a recent interview with serial entrepreneur Jim Cavale on the Now Its Legal podcast, ESPN Basketball Analyst and noted athletes’ rights advocate Jay Bilas presaged the most advantageous path forward for athletes and the NCAA, “The only smart thing to do for the NCAA is to go to Jeffrey Kessler … and reach a settlement, and as part of the settlement … come up with a framework and a system that everyone can live with,” Bilas said.
Key excerpt from interview with legendary attorney Jeffrey Kessler - explaining the primacy of the antitrust path in securing fair athlete compensation below.
Texas A&M Athletic Director Trev Alberts Estimates Annual Athlete Compensation Numbers
“Slowly over time, because we’re batting a thousand, in terms of losing lawsuits in the NCAA, more and more of the revenue we’ve been using to fund athletics is going to student-athletes,” Trev Alberts said at his introductory press conference. The former Nebraska football All-American and athletic director is seen as a national leader among the country’s most prominent athletic directors and was one of the first to publicly endorse NCAA President Charlie Baker’s Project D1 - which would remove restrictions on direct athlete compensation.
Alberts said that the revenue share between professional leagues, like the NBA and NFL and their players, is usually 50-50. He said that some financial modeling for college athlete revenue sharing reveals an annual number between $15-20 million, per athletics department, being paid directly to college athletes. Rather than bemoan revenue sharing with athletes, Alberts accepted that it would just be a new “line item” in the expense category for athletic departments going forward.
Alabama Athletic Director Greg Byrne Presented an Athlete Revenue Share Formula Based on existing University Intellectual Property Policies
In congressional testimony at a House Energy and Commerce Sub-Committee hearing on NIL this past January, TAB Publisher Chase Griffin spotlighted university intellectual property policies that permit royalties to be shared with student researchers for their contributions to IP that get commercialized by universities. Subsequently, in a March NIL Roundtable hosted by Senator Ted Cruz, Alabama Athletic Director, Greg Byrne, echoed Griffin’s sentiments and presented a formula for using university IP policy as a model to share revenue with college athletes. “Every school has some type of intellectual property policy where schools share in the value created with their employees and their students. That share is the same percentage for everyone...where it is recognized by revenue driven by each individual sport.”
Ohio State Athletic Director Ross Bjork Previewed a Revenue Share Process at his introductory Press Conference
Ross Bjork, the athletics director at The Ohio State University, expressed his desire for the university and Big Ten to “lead the way” in establishing a new system that shares revenue with college athletes.
“We need to chart a new course for the financial arrangement, the financial agreement, between the athlete and the institution … we need to recreate that model” Bjork said. “It’s past time to sit down with our athletes, understand what they want out of this experience … we either take action now, or action will continue to be taken against us.”
We believe this negotiating process will more likely be between the NCAA, conferences, and the antitrust attorneys on behalf of athletes as opposed to being directly with athletes through a union or players association initially.
Nebraska Athletic Director, Troy Dannen, commits to Athlete Revenue Sharing during his introductory Press Conference
“The one thing that's absolute that’s going to happen is there will be a line item in our budget for student-athletes at some point in time...it is not optional.”
Texas Athletic Director, Chris Del Conte on the role of Private Equity in Athlete Compensation and the near future of college athletics.
“In my mind I don’t really grasp how private equity will work...I’m not trying to pay anyone else. I’m trying to give our student athletes all the money they need,” Del Conte said in a recent interview on the Sporticast Podcast.
Final thoughts for athletes and those who care about us.
TAB is monitoring all of those potentialities closely and will report when/if any of them gain any real traction via formal adoption by the NCAA D1 Council. The April NCAA meetings should be illuminating. Athletes, coaches, ADs, university presidents, and alumni are joint stakeholders in the glorious enterprise that is college athletics. From these college campuses some athletes are being launched into the pro sports ranks and even more athletes will emerge as professionals and leaders in every field of human endeavor. College athletics, at its best, is central to the mission and growth of higher education. We all have too much at stake to leave it to outsiders, pundits, and self-styled disrupters to derail the athlete economic rights and empowerment trajectory we are on now.
TAB POV: Important Considerations for any Athletic Compensation Plan
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